IATA Says Airlines See Improved Outlook

April 23, 2012

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Chief financial officers and heads of cargo at the world's airlines reported growing confidence in their profitability and an improved outlook for the next 12 months, according to a survey by the International Air Transport Association released on Monday.

"With the US economy showing improvement and emerging markets continuing to grow strongly, expectations for passenger traffic volumes have become more optimistic," the trade group, which represents about 240 airlines in 118 countries, said in its quarterly business confidence index.

IATA said about 23 percent of respondents reported improved profitability in the last 3 months. The participants reported improved passenger traffic over the last quarter, with expectations for further growth ahead.

But high oil prices and concerns about political uncertainty in Iran have propped up costs. IATA said 64 percent of respondents reported increased cost pressures. Airlines expect a significant increase in their operating costs over the next 12 months, IATA said.

Survey participants expect higher passenger yields in the next 12 months on the heels of weakness in the last quarter.

(Reuters)